States still owe feds millions from failed bridge project

Oregon, Washington unsure where funding will come from, environmental research near expiration

Jun 24, 2016

Washington and Oregon still owe the Federal Highway Administration (FHWA) about $196 million they borrowed for funding the development stage of the Columbia River Crossing (CRC) project, which died two years ago.

The states must pay back the funds to the federal government by September 2019.

“Both legislatures are on the hook for those particular moneys for the federal government,” said Rep. Jim Moeller, who represents Washington’s 49th legislative district and had supported the CRC project. “We’ll have to pay it back. That’s the agreement we made.”

Two years ago, the FHWA granted both states extension requests to push back the original repayment deadlines for the federal money borrowed more than 10 years ago.

Typically, the FHWA requires repayment of federal funds on construction projects within 10 years of the fund authorization date. In Washington, federal funds were first authorized in 2004, and in 2007 in Oregon.

Washington owes the federal government about $94.1 million, while Oregon owes another $102.5 million, according to a CRC expenditure report. The states expended the money on public relations, planning, design and environmental research – all required as project first steps.

“A lot of people have remarked on how much money it is,” said Dave Thompson, public affairs program manager for the Oregon Department of Transportation (ODOT). “But when you’re talking about a project that’s on the order of between $2.5 and $4 billion, $200 million is a small percentage of that.”

If and when the money is paid back to the federal government, the funds will go toward the federal highway trust fund for use in future projects, said Doug Hecox, spokesman for the FHWA.

“We have every reason to believe the states will make good on this agreement,” said Hecox.

The about $3 billion project would have replaced the existing I-5 Interstate Bridge over the Columbia River with a larger and light rail-friendly structure. The Washington Legislature shuttered the project when it failed to pass funding in 2014.

Paying back the money

Neither state has identified when or how it will pay back the money to the FHWA, said Moeller. “Government is more reactive than it is proactive, so we will promptly wait until the 11th hour.”

The Washington State Legislature and the Oregon State Legislature will ultimately decide where the money comes from to pay back the federal government.

CRC paid a significant amount of its pre-development funds to David Evans, a Portland-based general contractor, who served as the project’s consultant.

“[CRC] made it a top priority to pay cash for the consultant and they need to make it the same priority to pay the cash back,” said David Madore, who serves as a county counselor for Clark County and opposed the CRC.

The states might have more options in 2019. At that point, smart investments might pay off, so Washington and Oregon may have more cash available, said Moeller.

In Oregon, the legislature may provide a special allocation of funding from ODOT to pay back its half of the research funds, according Travis Brouwer, assistant director of ODOT.

Other ways to pay back the balance owed could include bonds, taxes or lottery sales.

“I don’t think a voter-approved tax is realistic to fund the [repayment],” said Stephen Horenstein, who served as co-chair on a high-level CRC advisory committee. “I think they would need to find the money someway that doesn’t require the vote of the people.”

CRC data expiring soon

The environmental impact statement (EIS) and other traffic and engineering studies – which were completed in 2014 – have a shelf life of about three years, Thompson said. The data might still be applicable up to 2017, or be useful for background research if the project were ever revisited.

For example, geo-technical work, which looks at conditions of riverbeds, may remain relevant for years to come. But environmental permits, coast guard permits and analytic work – specifically traffic studies – have time limits associated with them.

“When you’re going over a river and both sides are wetlands, it’s a phenomenal amount of work,” Thompson said. “There are studies and data galore.”

The Washington Department of Transportation (WDOT) and ODOT spent about $196 million in pre-construction research over a 10-year period, with the largest chunk going toward drafting and finalizing the EIS – a federal mandate required by the National Environmental Policy Act.

The EIS, which totaled about $81 million, was completed with help from a 39-member bi-state task force and consultants with engineering and environmental expertise. The results of the study informed project planning and the narrowing down to five bridge design alternatives.

“The further along we go, the less useful all the information developed for the prior project is, and the more likely it is we will be doing a complete do-over if the [CRC project] is ever revived,” said Horenstein.

Future action

Even though Washington and Oregon have officially abandoned the CRC project, some leaders are having conversations about a new iteration of the project.

“It’s a ground-up thing. I’ve already started talking about it in the community,” said Horenstein.

The proposed project Horenstein refers to would include a bi-state compact between Washington and Oregon, along with a federal oversight committee to make project-based decisions and to prevent “turf battles.” To get the green light, the project would require approval from the states’ legislatures and the federal government.

It is possible the states won’t have to repay the FHWA in 2019. If steps are taken to move toward the construction phase of the CRC or a similar project, the FHWA may extend the deadline.

“I think the FHWA will be very open to saying we are making good faith efforts to move the project forward, and would be willing to extend that deadline,” said Brouwer. “For example, if we move into the right-of-way purchase stage of the project, then that 10-year clock restarts.”

People have interpreted a 2014 letter from the FHWA – which outlines the conditions surrounding the 2019 time extension – in two ways. If design or construction begins for a new project before the deadline, it must be based on the CRC’s original record of decision in order for the states to defer the payment.

“As I understand the law, the record decision defines a very specific project and that record of decision has to be built to be counted as that project,” Madore said. “If that project doesn’t get built based on that record of decision, which was a light rail project, then we need to pay the money back.”

On the other hand, any project that improves freight mobility and improves traffic congestion may also waive the deadline.

“The letter doesn’t say that we have to build the CRC project, but it says the purpose and need of a new crossing must improve freight mobility and improve traffic congestion,” said Rep. Liz Pike, who represents Washington’s 18th legislative district and supports “multiple bridges instead of one large bridge.”

“If we have a project underway that meets those objectives by [the 2019 deadline],” Pike explained, “we won’t have to pay that money back and it will be credited against whatever they give us on the next project.”

In January, Pike received unanimous support for a bill (Substitute House Bill 2414) that would create a bi-state bridge committee of eight Washington and eight Oregon legislatures. However, because of time constraints, the bill did not pass.

Pike said she plans to reintroduce the bill in January.

“I think by 2019, if we don’t have new bridges in the design and building stages, we’re going to be sentencing our commuters and our businesses in this region to decades more of gridlock,” she said.

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